PONMUNDAM PROPERTIES PVT.LTD. vs. ASSISTANT COMMISSIONER OF INCOME TAX

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WP(C)/41795/2018HC KeralaKLHC01096876201820 December 2018Author: HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala, while not deciding the merits of the case, recorded the submission made by the learned Standing Counsel for the revenue. The Standing Counsel informed the Court that the Commissioner of Income Tax would consider the petitioner's application (Ext.P6) expeditiously. Based on this submission, the Court disposed of the writ petition. The specific issue regarding the legality of the 20% pre-condition for stay was not adjudicated upon by the High Court in this writ petition. The operative direction was for the Commissioner to consider the application promptly.

What were the facts?

For assessment year 2016-17, the petitioner, M/s. Ponmundam Properties Pvt. Ltd., filed a statutory appeal and a stay petition. While the appeal was pending, the petitioner filed an application under Section 220(6) of the Income Tax Act. The Assistant Commissioner of Income Tax, through an order (Ext.P5), disposed of this application by requiring the petitioner to pay 20% of the demand as a pre-condition for a stay. The petitioner then challenged this order before the Commissioner of Income Tax (Ext.P6). The present writ petition was filed seeking an early disposal of the application before the Commissioner.

What were the issues?

1. Whether the Assistant Commissioner of Income Tax was justified in demanding 20% of the tax as a pre-condition for considering the stay application under Section 220(6) of the Income Tax Act, 1961. The petitioner contended that the Assistant Commissioner's order imposing a 20% payment as a pre-condition for stay was arbitrary and not in line with the principles of natural justice. They sought an early disposal of their application before the Commissioner of Income Tax (Appeals). The revenue, represented by the learned Standing Counsel, submitted that the Commissioner of Income Tax would consider the petitioner's application expeditiously.

Which sections of the Income-tax Act were involved?

Section 220(6)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU THURSDAY ,THE 20TH DAY OF DECEMBER 2018 / 29TH AGRAHAYANA, 1940 WP(C).No. 41795 of 2018 PETITIONER/S: M/S.PONMUNDAM PROPERTIES PVT.LTD. 11/13, PUTHUKUDI, PONMUNDAM P.O., MALAPPURAM - 676 106, REPRESENTED BY MANAGING DIRECTOR P.K.HAMZA. BY ADVS. SRI.ANIL D. NAIR SHRI.GOKULRAJ L. SMT. ARYA ANIL SMT. NILOOFAR O. NIZAM SRI.SREEJITH R.NAIR RESPONDENT/S: 1 ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE (II), KOZHIKODE - 673 001. 2 THE COMMISSIONER OF INCOME TAX (APPEALS III) ERNAKULAM - 682 036. OTHER PRESENT: SRI JOSE JOSEPH, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20.12.2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: -2- W.P.(C). No. 41795 of 2018

JUDGMENT For the assessment years 2016-17, the petitioner filed a statutory appeal along with a stay petition. Pending that appeal, the petitioner filed an application under Section 220(6) of the Income Tax Act. The Assistant Commissioner of Income Tax has, however, disposed of the petitioner's Ext.P4 application through the Ext.P5 order. That authority required the petitioner to pay 20% as a pre- condition to have the proceedings stayed. Then, the petitioner challenged the Ext.P5 before the Commissioner of Income Tax, through Ext.P6 application. Seeking its early disposal, the petitioner has filed this writ petition.

2.

In response to the submissions made by the petitioner's counsel, the learned Standing Counsel informs the Court that the Commissioner of Income Tax will consider the Ext.P6 application expeditiously. Recording that submission, I dispose of the writ petition. DAMA SESHADRI NAIDU JUDGE das

-3- W.P.(C). No. 41795 of 2018 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1OF THE ASSESSMENT ORDER DATED 30/12/2017. EXHIBIT P2OF THE APPEAL FILED BEFORE THE 2ND RESPONDENT. EXHIBIT P3OF STAY PETITION FILED BEFORE THE 2ND RESPONDENT. EXHIBIT P4OF THE APPLICATION UNDER SEC.220(6) FILED BEFORE THE 1ST RESPONDENT. EXHIBIT P5OF THE ORDER BY THE 1ST RESPONDENT DATED 02/02/2018. EXHIBIT P6OF LETTER DATED 12/02/2018.

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